May 8, 2018

Financial Report(January 1 ~ March 31, 2018)

2

Key Subjects

2018 1st QuarterFinancial Results Summary

Changes in Scope of Consolidation, Affiliated CompaniesFinancial Results Summary

2018 Annual Financial Results ForecastFinancial Results Forecast SummaryCapex / Depreciation, Tire Production Capacity etc.

3

Consolidated Subsidiaries 90(vs 2017 year-end : - )

Equity-method Affiliates 3(vs 2017 year-end : - )

NewlyIncluded +2 Excluded (2) Newly

Included - Excluded -

Tires

Chengdu D Guard AutomotiveServices Co., Ltd.（China/ Sales company of tires）

Sports

Dunlop Sports Co. Ltd.Dunlop International Co. Ltd.（Merged with Sumitomo Rubber

Industries, Ltd.）

Industrial &

Other

Sports Surface Co., Ltd.（Japan/ Design and construction

company of tennis courts）

Changes in Scope of Consolidation

4

Manufacturing Companies Sales Companies Other Companies

TiresDomestic 1 Domestic 11 Domestic 7

Overseas 8 Overseas 19 Overseas 5

Asia Pacific 4 Asia Pacific 11 Asia Pacific 1

Europe and Africa 2 Europe and Africa 6 Europe and Africa 2

Americas 2 Americas 2 Americas 2

Sports

Domestic 1 Domestic 1 Domestic 5

Overseas 3 Overseas 15 Overseas 7

Thailand, U.S., Philippines

Malaysia, U.K., Australia, Canada, China, Hong Kong, South Africa, South Korea, Thailand,France, Germany

U.K.

Industrial &

Other

Domestic 1 Domestic 3 Domestic －

Overseas 5 Overseas 1 Overseas －

Malaysia, China, Vietnam, Switzerland, Slovenia Hong Kong － TOTAL 93

Domestic 30Overseas 63

Affiliated Companies (Consolidated Subs: 90, Equity-method Affiliates : 3)

2018Jan.-Mar.

2017Jan.-Mar.

vs2017

2017Annual

Sales Revenue

BusinessProfit (%)

OperatingProfit (%)

Profit

5

※1

※2

※1. Business Profit : Sales Revenue – (COS + SGA)※2. Profit : Profit attributable to owners of parent

The above notes apply throughout this report.

Billions of Yen

Consolidated Financial Results (2018 Jan.-Mar.)

212.7 192.1 111% 877.9

14.3 12.2 67.0(6.7%) (6.3%) (7.6%)

14.0 11.8 67.4(6.6%) (6.2%) (7.7%)

7.7 8.6 90% 47.0

117%

118%

163.9

190.7 185.2 182.7

9.1%

9.7%

6.5%7.5%15.0

18.5

12.1 13.7

14.4

17.9

12.0 12.6 8.8%

9.4%

6.5% 6.9%

9.0 10.9

7.7

16.8

0

5

10

15

20

25

0.0

50.0

100.0

150.0

200.0

2013 2014 2015 2016Net Sales (JGAAP) / Sales Revenue(IFRS) : Left Operating Income (JGAAP) / Business Profit (IFRS)Ordinary Income (JGAAP) Operating Profit (IFRS)Profit attributable to owners of parent (JGAAP) / (IFRS)

Japanese G A A P I F R S

6

%：Profit % ：Record HighBillions

of Yen

Consolidated Sales Revenue / Profit (Jan.-Mar.)

178.3 192.1

212.7

8.0%

6.3%

6.7%

13.5 11.8

14.0

14.2 12.2

14.3

7.6%6.2%

6.6%

8.2 8.6 7.7

0.0

5.0

10.0

15.0

20.0

25.0

2016 2017 2018

7

Billions of Yen

2018Jan.-Mar.

2017Jan.-Mar.

vs2017

2017Annual

Sales Revenue

Tires

Sports

Industrial& Other

Total

Business Profit

Tires

Sports

Industrial& Other

Total

181.3 165.6 109% 756.6

20.8 16.8 123% 81.7

10.6 9.7 110% 39.6

212.7 192.1 111% 877.9

11.4 10.1 114% 58.3

1.8 1.1 166% 4.4

1.0 1.0 99% 4.3

14.3 12.2 117% 67.0

Consolidated Sales Revenue / Business Profit by Reportable Segment(2018 Jan.-Mar.)

Japanese G A A P I F R S

8

Billionsof Yen

13.8

16.5

11.9 12.5

0.6 0.6

(0.2)

0.9 0.6 1.3

0.5 0.3

15.0

18.5

12.1 13.7

(2.5)

2.5

7.5

12.5

17.5

2013 2014 2015 2016

Tires Sports Industrial & Other Operating Income (JGAAP) / Business Profit(IFRS)

Consolidated Business Profit by Reportable Segment (Jan.-Mar.)

13.0

10.1 11.4

0.7 1.1 1.8 0.5 1.0 1.0

14.2

12.2

14.3

2016 2017 2018

8.2

4.3

2.0

5.3 5.7 7.2

0.7 2.2

5.1

14.2 12.2

14.3

2016 2017 2018

10.2

12.8

4.5

8.0

4.2

6.3 5.8 5.2

0.6 (0.6)1.8

0.5

15.0 18.5

12.1 13.7

(2.5)

2.5

7.5

12.5

17.5

2013 2014 2015 2016

Japan Asia Others Operating Income (JGAAP) / Business Profit (IFRS)

I F R S

9

Japanese G A A P

JapanAsia

OthersTotal

Billionsof Yen

※Sales and Profit for geographic areas on this page are based on sales company’s location.

Sales Revenue94.3 109.1 97.4 86.3 82.6 85.8 92.532.4 35.5 38.2 35.2 35.2 40.1 40.837.1 46.0 49.6 61.1 60.6 66.1 79.3

163.9 190.7 185.2 182.7 178.3 192.1 212.7

Consolidated Business Profit by Geographic Areas (Jan.-Mar.)

10% of Overseas

ConsolidatedSales Revenue

Japanese G A A P I F R SBillionsof Yen

※Overseas Sales on this page are based on customer’s location.

Overseas Sales Revenue (Jan.-Mar.)

21.8 20.0 25.5 32.8

15.4 17.3 14.7 15.0

33.4 36.8 40.2 37.4

17.8 22.8

25.9 25.7 88.4 97.0

106.3 111.0

0.0

25.0

50.0

75.0

100.0

125.0

150.0

2013 2014 2015 2016North America Europe Asia Other

32.1 35.8 32.4

14.9 19.6 34.4

37.3

41.5

42.3 25.2

25.2

25.4 109.5

122.1

134.4

2016 2017 2018

163.9 190.7 185.2 182.7 178.3 192.1 212.754% 51% 57% 61% 61% 64% 63%

12.214.3

0.0

5.0

10.0

15.0

11

2017Jan.-Mar.

2018

Tires +1.4Total +2.1

Raw

Material

+5.5

Price

Volume &

Mix

Direct C

osts

+0.4

(1.5)

Fixed Costs

Forex

+0.2

Expense

(1.9)Sports

+0.7Industrial&

Other

(2.2)

+0.9

0.0 Jan.-Mar.

Raw Material PriceVolume &

Mix Direct Costs Fixed Costs Forex Expense SportsIndustrial &

Other Total

2016 → 2017

2015 → 2016 - - - - - - - - - -

※Blue＝IncreaseRed＝DecreaseBillions

of Yen

Consolidated Business Profit Walk (2018 Jan.-Mar.)

Average Exchange Rate

USD →EUR →

114 108121 133

Natural Rubber + 2.8

Pet. Related (4.3)

Others (0.7)

(6.9) (2.0) 6.3 1.3 (1.0) (0.3) (0.4) 0.4 0.6 (2.0)

Natural Rubber (4.8)Pet. Related (2.1)Others 0.0

12

Billions of Yen

【Forecast】Consolidated Financial Results (2018 Jan.-Jun.)

No change sinceFeb. 14th 2018 Forecast

Forecast2018

Jan.-Jun.

Actual2017

Jan.-Jun.

vs2017

Forecast2018

Apr.-Jun.

Actual2017

Apr.-Jun.

SalesRevenue

BusinessProfit (%)

OperatingProfit (%)

Profit

430.0 403.4 107% 217.3 211.3

26.5 21.8 12.2 9.7(6.2%) (5.4%) (5.6%) (4.6%)

26.5 21.2 12.5 9.4(6.2%) (5.3%) (5.7%) (4.4%)

16.5 12.4 133% 8.8 3.9

121%

125%

358.9 403.4

430.0

8.5%

5.4%

6.2%

29.1

21.2

26.5

30.4

21.8

26.5

8.1%

5.3%

6.2%

18.0

12.4

16.5

0.0

10.0

20.0

30.0

40.0

2016 2017 2018 Forecast

345.9 378.6 388.9 373.6

8.6%9.3%

7.5%

8.2%

29.7

35.1

29.3

30.8

27.7

35.1 31.0

27.7 8.0%

9.3%

8.0%

7.4%

15.5

21.8 20.0

28.1

0

5

10

15

20

25

30

35

40

45

0.0

100.0

200.0

300.0

400.0

2013 2014 2015 2016Net Sales (JGAAP) / Sales Revenue(IFRS) : Left Operating Income (JGAAP) / Business Profit (IFRS)Ordinary Income (JGAAP) Operating Profit (IFRS)Profit attributable to owners of parent (JGAAP) / (IFRS)

Japanese G A A P I F R S

13

Billionsof Yen

%：Profit % ：Record High

【Forecast】Consolidated Sales Revenue / Profit (Jan.-Jun.)

No change sinceFeb. 14th 2018 Forecast

14

Billions of Yen

【Forecast】Consolidated Sales Revenue / Business Profitby Reportable Segment (2018 Jan.-Jun.)

No change sinceFeb. 14th 2018 Forecast

Forecast2018

Jan.-Jun.

Actual2017

Jan.-Jun.

vs2017

Forecast2018

Apr.-Jun.

Actual2017

Apr.-Jun.

Sales Revenue

Tires

SportsIndustrial & Other

Total

Business Profit

Tires

Sports

Industrial & Other

Total

367.0 346.2 106% 185.7 180.7

44.0 37.9 116% 23.2 21.1

19.0 19.3 99% 8.4 9.6

430.0 403.4 107% 217.3 211.3

22.0 17.4 126% 10.6 7.4

3.0 2.5 120% 1.2 1.4

1.5 1.9 78% 0.5 0.9

26.5 21.8 121% 12.2 9.7

21.826.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Tires +4.6Total +4.7

+5.0

Raw

Material

+5.3

Price

Volume &

Mix

Direct C

osts

+1.0

(2.4)

Fixed Costs

Forex

0.0

Expense(4.8)

Sports+0.5

Industrial&

Other

+0.5

15

Average Exchange Rate

USD →EUR →

Raw Material PriceVolume &

Mix Direct Costs Fixed Costs Forex Expense SportsIndustrial &

Other Total

Feb. 14th Forecast

2016→2017

(0.4)

※Blue＝IncreaseRed＝Decrease

Billionsof Yen

2017Jan.-Jun.

2018Jan.-Jun.

112 108122 133

Natural Rubber + 9.1

Pet. Related (2.7)

Others (1.4)

Natural Rubber + 7.6Pet. Related (0.9)Others + 0.0

6.7 4.3 1.9 1.9 (3.1) (1.4) (5.7) 0.5 (0.4) 4.7

(22.1) (0.8) 13.6 2.3 (1.6) 0.5 (1.6) 0.1 1.1 (8.5)

【Forecast】Consolidated Business Profit Walk (2018 Jan.-Jun.)

Forecast2018

Actual2017

YOY

Sales Revenue

BusinessProfit (%)

Operating Profit (%)

Profit

ROE

ROA

D/E Ratio16

Billions of Yen

【Forecast】Consolidated Financial ResultsNo change sinceFeb. 14th 2018 Forecast

※

※ROA : “Business Profit” / “Total Assets”

910.0 877.9 104%

73.0 67.0(8.0%) (7.6%)

73.0 67.4(8.0%) (7.7%)

48.0 47.0 102%

10.1% 10.6%7.2% 7.0%

0.5 0.6

109%

108%

798.5 756.7

877.9 910.0

89.2

73.3 67.4

73.0 78.9

74.9

67.0

73.0 9.9%

9.9%

7.6%

8.0%

11.2%

9.7%

7.7%

8.0%72.0

41.4 47.0 48.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

2015 2016 2017 2018 Forecast

837.6 848.7 805.0

10.3%

9.1%

9.2%

86.3 77.1

74.3

88.0 78.9

71.0

10.5%

9.3%

8.8%

53.2 55.8 49.9

0

20

40

60

80

100

120

0.0

200.0

400.0

600.0

800.0

1,000.0

2014 2015 2016Net Sales (JGAAP) / Sales Revenue(IFRS) : Left Operating Income (JGAAP) / Business Profit (IFRS)Ordinary Income (JGAAP) Operating Profit (IFRS)Profit attributable to owners of parent (JGAAP) / (IFRS)

※

Japanese G A A P I F R S

17

Billionsof Yen

%：Profit % ：Record High

【Forecast】Consolidated Sales Revenue / Profit

No change sinceFeb. 14th 2018 Forecast

※ 2015 IFRS numbers are unaudited, and are for reference throughout this report.

18

Billions of Yen

【Forecast】Consolidated Sales Revenue / Business Profit by Reportable Segment

No change sinceFeb. 14th 2018 Forecast

Forecast2018

Actual2017

YOY

Sales Revenue

Tires

SportsIndustrial & Other

Total

Business Profit

Tires

Sports

Industrial & Other

Total

785.0 756.6 104%

85.0 81.7 104%

40.0 39.6 101%

910.0 877.9 104%

65.0 58.3 111%

4.0 4.4 91%

4.0 4.3 94%

73.0 67.0 109%

67.0 73.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Raw Material PriceVolume &

Mix Direct Costs Fixed Costs Forex Expense SportsIndustrial &

Other TotalFeb. 14th Forecast

2016→2017

+8.7

20172018

Tires +6.7Total +6.0

+0.5

Raw

Material

+5.2

Price

Volume &

Mix

Direct C

osts

+4.2

(5.1)

Fixed Costs

Forex

(0.4)

Expense(6.4)

Sports

(0.4)

Industrial &

Other

(0.3)

0.0

19

Average Exchange Rate

USD →EUR →

Price Q1 Q2 Q3 Q4 Ave.Natural Rubber

(TSR 20)20182017

Crude Oil(DUBAI)

20182017 ($/bbl)

($/kg)

※Blue＝IncreaseRed＝Decrease

Billionsof Yen

【Forecast】Consolidated Business Profit Walk (2018 Annual)

Natural Rubber + 8.7

Pet. Related (5.2)

Others + 0.0

112 108127 132

Natural Rubber + 11.9

Pet. Related (9.3)

Others (2.1)

1.49 1.47 1.42 1.42 1.451.77 2.10 1.64 1.48 1.75

58 64 67 68 6445 50 53 48 49

3.5 5.3 8.7 4.9 (5.6) (2.6) (7.5) (0.4) (0.3) 6.0

(36.0) 9.5 19.7 4.6 (3.6) 1.5 (5.3) 0.1 1.6 (7.9)

20

(vs Feb. 14th Forecast)

Billions of Yen

Consolidated Business Profit Analysis by Factors

Period Business ProfitFactors

Raw

M

aterial

Price

Volume

& M

ix

Direct

Costs

FixedC

osts

Forex

Expense

Sports

Industrial &

Other

vs previous

year

2017

Jan.-Mar.

Apr.-Jun.

Jul.-Dec.

Annual

2018

Jan.-Mar.

Apr.-Jun.

Jul.-Dec.

Annual

12.2 (2.0) (6.9) (2.0) 6.3 1.3 (1.0) (0.3) (0.4) 0.4 0.6

9.7 (6.5) (15.2) 1.2 7.3 1.0 (0.6) 0.8 (1.2) (0.3) 0.5

45.1 0.6 (13.9) 10.3 6.1 2.3 (2.0) 1.0 (3.7) 0.0 0.5

67.0 (7.9) (36.0) 9.5 19.7 4.6 (3.6) 1.5 (5.3) 0.1 1.6

14.3 2.1 (2.2) 5.5 0.9 0.4 (1.5) 0.2 (1.9) 0.7 0.0

12.2 2.6 7.2 (0.2) (0.4) 0.6 (0.9) (0.2) (2.9) (0.2) (0.4)

46.5 1.4 (4.5) (0.1) 8.2 3.2 (2.7) (0.4) (1.6) (0.9) 0.1

73.0 6.0 0.5 5.2 8.7 4.2 (5.1) (0.4) (6.4) (0.4) (0.3)

0.0 (3.0) (0.1) 0.0 (0.7) 0.5 2.2 1.1 0.0 0.0

21

Tire Sales Volume (Comparison %)

Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Annual Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Annual Jan.-Jun. Jul.-Dec. Annual

113% 111% 111% 107% 110% 103% 105% 98% 96% 100% 105% 96% 100%

103% 114% 106% 100% 105% 102% 96% 97% 104% 100% 98% 99% 99%

114% 107% 113% 104% 109% 100% 112% 130% 133% 119% 105% 128% 117%

112% 112% 112% 109% 111% 103% 101% 106% 105% 104% 106% 105% 106%

NorthAmerica 121% 102% 107% 112% 110% 87% 99% 102% 102% 98% 98% 101% 99%

Europe 130% 182% 173% 137% 154% 142% 107% 107% 104% 114% 123% 101% 111%

Asia 106% 102% 104% 98% 102% 97% 111% 109% 110% 107% 108% 112% 110%

Others 98% 105% 97% 101% 100% 99% 91% 107% 106% 101% 103% 106% 105%

111% 112% 111% 106% 110% 102% 102% 107% 108% 105% 104% 106% 105%

28,230 29,920 31,810 33,510 123,470 28,880 30,510 33,940 36,140 129,480 60,730 69,260 129,990

OverseasO.E.

OverseasRep.

Details

Total

Total T ire Sales (000 Units)

DomesticRep.

2017 Actual2018 Jan.-Mar. Actual,

Apr.-Dec. Forecast 2018 Feb.14th Forecast

DomesticO.E.

22Forex(USD)

000 units

※Numbers shown in the bar graph are yoy% by region.

Tire Overseas Rep. Volume by Regional Segment

101

113 106

104

111 104

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2013 2014 2015 2016 2017 2018 Forecast

North America South & Central America

Europe (including Russia) Africa

Middle East Asia

Oceania

94

156

98

95

105

108

134

101

597

104

109

129

124

82

119

100

82

104

101

108

114

98

116

110

102

154

104

102

93

98

103

114

100

107

96

98 106 121 109 112 108

58.6 62.8

58.9

49.6

38.1 42.7 39.5 29.0

37.5 41.4

46.5

45.9

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2013 2014 2015 2016

Total Capex Overseas Depreciation 23

Japanese G A A P I F R SBillionsof Yen

Capex and Depreciation (Tangible Assets Only)

58.9

49.6

62.5

74.0

39.5 29.0

41.8 55.6

45.8

45.7

50.2 53.0

2015 2016 2017 2018 Forecast

No change sinceFeb. 14th 2018 Forecast

0

10,000

20,000

30,000

40,000

50,000

60,000

2013/12 2014/12 2015/12 2016/12 2017/12 2018/12

10,350 10,350 10,350 10,350 10,350 10,350

6,150 6,150 6,150 6,150 6,150 6,150

9,350 9,350 9,350 9,350 9,350 9,350

750 750 750 750 750 750

5,100 5,100 5,100 5,100 5,100 5,100

6,650 6,650 7,000 7,000 7,000 7,200 1,300 1,900 1,900 1,900 2,450 2,950

11,400 12,300 14,500 14,500 14,550 14,550 250 1,000

1,700 1,700 1,700 1,900

850 850

950 1,400 1,400 1,500 450 900 1,700 2,250 2,400 2,400 2,700 2,950

52,150 54,400

60,600 61,500 63,200 65,000

U.S.

Turkey

South Africa

Brazil

Thailand

China(Hunan)

China(Changshu)

Indonesia

Izumiotsu

Miyazaki

Nagoya

Shirakawa

24

YOY

Overseas

Dom

estic

t/Mth

% of Overseas

Tire Production Capacity

49% 51% 56% 57% 58% 59%

105% 104% 111% 101% 103% 103%

Forecast

No change sinceFeb. 14th 2018 Forecast

534 588 598

636 679

715

250 295 324

374 415 447

9095

9187

92 94

40

50

60

70

80

90

100

0

100

200

300

400

500

600

700

800

900

2013 2014 2015 2016 2017 2018 Forecast

Total Production Volume Overseas Operating Ratio(%)

YOY

25

％000t

Tire Production Volume and Operating Ratio

102% 110% 102% 106% 107% 105%

26“XXIO X (TEN)” SRIXON “REVO CX”

New Products / New Technologies

Babolat NEW “Pure Drive”※Dunlop Sports Marketing Co. Ltd. is the sole

selling agent of Babolat in Japan.

25.430.8

39.249.3

57.0

68.9

36.046.3

54.5 55.165.3

69.7

46.032.8

40.447.7

26.8 33.6 49.3

61.5 68.4

93.6 61.7 78.0

105.9 109.1 105.1

96.6

51.1 41.4

53.2 64.2

20.0

40.0

60.0

80.0

100.0

120.0

140.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Q1

100.4 120.7 138.6194.6 215.3

253.0180.4

338.0

451.9

315.6

251.7

171.1 137.5 137.4165.1 146.6

0.0

100.0

200.0

300.0

400.0

500.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Q1

27

US $/bbl

NR SICOM TSR20 (Ave.)

Naphtha Price (prod. in Japan)

Crude Oil (DUBAI)

¥000/kl

US￠/kg

Market Price : Natural Rubber / Crude Oil / Naphtha

END

28